Fighting Economic Disparity

Jul 11, 2018 03:17PM
● By Emily Stevenson

By Dan McCue

When it comes to writing or consuming economic development news, the big sweeping events are the easiest to get a handle on. A Volvo or a Boeing or a BMW comes to town, and we all grasp that it's something that needs to be digested in terms of investment, activity, and jobs to be created down the road.

Less easy to quantify are the long-term and decidedly more low-profile initiatives that the results of which are often among the reasons multinationals consider South Carolina a worthwhile place to do business.

"The big announcements , the arrival of Boeing, the arrival of Volvo ... all of that is great," says Bernie Mazyck, chief executive officer of Charleston-based South Carolina Association for Community Economic Development. "The broader economic picture looks good. Unemployment in South Carolina, as we speak, is just 3.9 percent.

"But when you drill down, huge disparities remain. A third of the jobs in South Carolina are still low-wage jobs, meaning that there are many people and families that are still not earning enough to get ahead, let alone build wealth."

Mazyck and his organization, also known by the acronym SCACED, have spent the past 24 years working to change that by building a network of nonprofits to nurture and grow micro-businesses across the state. They accomplish this in part by utilizing tax credits to invest in areas of the state that are lagging economically.

"What we do doesn't generate a lot of flashy headlines. We don't talk in one press release about how, based on our work, 5,000 or even 500 jobs are coming to an area. Nevertheless, the impact of our members is tremendous," Mazyck says.

"Over the last four years, our members have been able to attract over $15 million into distressed and rural communities across the state, creating nearly 3,000 jobs," he says. "It's all about working with local partners and bringing about opportunities for prosperity.

"That takes time, and it's more long term, but it's what you have to do if opportunity is going to establish a foothold," he adds. "You have to build an infrastructure of resources and capacity at a community level that individuals and families can thrive and succeed economically."

In explaining his almost missionary zeal for economic development on the most local of levels, Mazyck points to a series, "The Forgotten South Carolina," that the Post and Courier published in 2013. Although he was already well into his work by the time the series hit driveways and mailboxes, he says it "really highlighted the fact we still have two South Carolinas," he says.

"We have the more prosperous urban centers, like Charleston, Greenville, Spartanburg, and Columbia, and then we have other areas, like Allendale and Union counties, among others, that aren’t doing as well," Mazyck says. "There are great disparities in income and great disparities of wealth in our state, and it benefits everyone to do something about that."

He describes his association as an "intermediary organization" made up of nonprofits, for-profits, banks, corporations, and local governments, all of whom are focused on creating prosperity in communities that have been bypassed, for a variety of reasons, by the state's overall economic good fortune.

The association employs a variety of strategies to achieve its objectives. It works with state and local officials to foster policies to jumpstart entrepreneurship in more rural parts of South Carolina, and strives to build the capacity of local entities to work on job development, better schools, "whatever it takes in that particular area," Mazyck says.

"We look at every means available in our state and try to find ways to package them so they can attract capital to low income communities and help them become part of the economic engine of South Carolina," he says.

Toward that end, Mazyck says he was particularly pleased that U.S. Sen. Tim Scott was able to get an economic "Opportunity Zone" package included in the GOP tax cut passed by Congress last December.

The plan makes distressed communities eligible for tax incentives designed to encourage companies and developers to create businesses and affordable housing. In March, Gov. Henry McMaster submitted a list of 135 South Carolina communities to the U.S. Treasury Department for consideration.

"This kind of legislation is critical to what we're trying to do," Mazyck says.

But why, one may be tempted to ask, invest in a poor or rural community? Mazyck embraces the question.

"I think one of the greatest misnomers out there is that those who invest in a poor or rural community will not see a return on their investment," he says. "Now, it may take longer to see those returns, but the fact remains they can be made by investing in economically challenged communities.

"Secondly, if people aren't making a living wage, and are unable to buy a home as a means of building individual and family wealth, then you are very likely to see them have to rely, continuously, on public assistance, and that adds to the tax burden of everyone.

"On top of all this, you want all of your state to be productive and adding to the economy. If you have parts of your state that are not producing capital for the greater community, that's a loss for everyone.

"Perhaps, rather than thinking of these communities as 'poor' and 'rural,' we should see them as 'under-resourced,' because the reality is there is a lot of capacity in these communities. They all have tremendous assets and attributes. It's just a matter of 'how do we identify them?' and 'how do we package them?' so that we can attract capital and thereby create growth.

"People have ideas. They have creativity. What they don't have, oftentimes, are institutions and vehicles that allow them to harness that entrepreneurial spirit and labor creativity to generate wealth," Mazyck says.